Sacramento equipment appraiser
Bankruptcy Equipment Appraisals: 5 Steps to Saving Money – Part 2
Part 2 of 2: Photographs, Inspection Efficiency & Accredition
Last week, we introduced 5 steps to saving money on an equipment appraisal and investigated the first 2. This week, we’ll finish up the 2-part series by focusing on the final 3 steps of the 5:
- Creating a thorough asset inventory spreadsheet
- Providing complete equipment information
- Taking useful equipment photographs
- Planning for maximum inspection efficiency
- Working with an experienced, qualified appraiser
While Step 3, Photographs, may be optional, Steps 4 & 5 are critical for every single equipment appraisal — whatever the reason for the appraisal!
Ag Equipment Appraiser at Colusa Farm Show
February 1 dawned clear and windy, a perfect day for the Colusa Farm Show, just a few miles down the road from our Northern California Equipment Appraisal Office here in Yolo Co. So we set up call forwarding from the office phone and spent the day at “the Granddaddy of Farm Shows,” admiring farm equipment and chatting with dealers, manufacturers, farmers, dairymen, ranchers and other fans of agricultural equipment.
What to Expect during an Equipment Appraisal
If you’re a business owner in the Sacramento or Northern California area who’s applying for an SBA loan, you might be wondering what’s involved in an equipment and machinery appraisal. This information would also apply to any qualified equipment appraisals you’ll want for buying or selling, expansion, insurance coverage, or future strategic growth planning.
SBA Loan Appraisals: Machinery & Equipment
Here at our Northern California Certified Machinery and Equipment Appraisal office, the phone’s been ringing off the hook with calls from Sacramento and Yuba City banks and other northern California financial institutions asking for qualified SBA loan appraisals on machinery and equipment for collateralized loans. The recent passage of the Small Business Jobs Act (H.R. 5297) has galvanized the business loan market!
Certified Equipment Appraiser: Who Needs One?
Lots of folks, when they need equipment appraisals, search the internet for a “certified” equipment appraiser.
As a Certified Public Accountant, I certainly understand the appeal of certification, and looking for a “certified” appraiser makes a lot of sense if by a certified machinery and equipment appraiser you mean an unbiased trained and knowledgeable professional who provides a report supporting an impartial opinion of value based on expert knowledge, adjusted comps and market research, in line with USPAP guidelines, ethics and appraisal procedures. Yeah, that’s what you want! Reports of this type will gladden the heart of your banker, lawyer, business partner and CPA.
Restaurant Equipment Appraiser has Restaurant Industry Background
Over the Memorial Day weekend, I had the priviledge of inspecting a series of restaurants for a machinery and equipment appraisal. Because the owners declined to provide a listing of Subject Assets, I took my lovely and clever wife along as “clipboard” assistant. She wrote while I measured, called out manufacturer names and model numbers, took pictures with my faithful Casio Exilim.
One reason I like restaurant appraisals is that I spent several years in my 20s cooking in Aspen, Tucson and Phoenix. It’s fun to be back in a professional kitchen, chatting with the chef about Hobarts and Groen stock pots, even if I am using a tape measure instead of a spatula! So I’m cook and food and beverage controller turned Restaurant Appraiser.
Sacramento Equipment Appraiser Offers More
I’ve gotten some interesting emails regarding the initial post on the Proposed Update of Valuation Terms. One email reminded me that I could make my comments directly to the definitions committee and/or on the ASA forums. Well, I would if any of those comments had been mine! I must not have made it clear in the original post that the comments added to the definitions were part of the original document, so I went back and did some editing to clarify that.
Appraisals for Insurance Purposes: Replacement & Reproduction Values
In the proposed Definitions of Values recently proposed by the Machinery and Technical Specialties branch of the ASA, no changes were made to the first 2 definitions:
- Reproduction Cost New is the cost of reproducing a new replica of a property on the basis of current prices with the same or closely similar materials.
- Replacement Cost New is the current cost of a similar new property having the nearest equivalent utility as the property being appraised.
Changes were made, however, to the definitions relating those two terms to the insurance industry. Here are the newly proposed definitions (bold & italic added):
Proposed Update of Valuation Terms
In April, the American Society of Appraisers released a proposal to update the current Definitions of Value approved by the Machinery & Equipment Committee and the American Society of Appraisers Board of Governors.
Over the next few blogs, I’ll share the entire definition list, but today I’d like to concentrate on 2 areas that caught my attention right away:
The first thing I noticed was the insertion of the term “opinion” in most of the definitions.This makes a lot of sense as valuation is not an absolute measurement of value but one arrived at through research and, in the words of former PCAOB Chief Auditor Thomas Rays, “the appropriate application of seasoned professional judgment.”
Premises of Value AKA Levels of Trade
The below definitions are from Valuing Machinery and Equipment, the American Society of Appraisers (2000).
Because the machinery and equipment appraiser deals with a variety of assets, most of which can be moved, it is necessary to recognize different premises of value. These can be broadly broken down into categories, distinguished mainly by an asset’s anticipated use.
